So, into the breach I go on this topic, Hawks.
The metal AM industry is still in the throws of determining if IPQA technology is the path they will take. Yet to come, assuming they go with IPQA, is determining the value-add price that is acceptable to both the industry and the IPQA providers. How much will the industry pay for the technology is yet to come.
An entire bank of printers can't compete cost-wise with conventional manufacturing if they have to use conventional post process quality inspection methods. From all that I have seen pretty much everyone who is anyone agrees with that statement. So unless a quality inspection process that does indeed compete in a time and cost manner is developed for metal AM, only the elite type of parts will be printed. Only those parts so specific to AM capabilities that they can command the cost, will be printed. Industry is simply not going to print parts in a manner that can't compete on cost.
So assuming that SGLB's PR3D is adopted, it will by default be an enabling technology. Therefore it will be a value-added technology; which is probably the most difficult kind of thing to put a price on. I know that myself and many others here have experience with the struggle to determine the proper value of a value-added product or service. It is an age-old problem.
Any entity considering a purchase of SGLB will certainly intend to capture all future profits from the acquisition. And we shouldn't expect those profits for ourselves if we agree to sell the company. But very simply, the price tag for SGLB should be its value-add for the current industry footprint, including that in the pipeline of demand for IPQA, plus a conventional premium for enabling those future profits.
So what is that purchase price tag? Not $40 million by a log shot. There are already an awful lot of metal AM machines in use. And with the adoption of IPQA they all become immediate opportunities. Wholers 2018 reported AM total spend of $6.1 billion in 2016, 30% of which was for metal AM. In 2017 there were 1,768 metal AM printers sold. In 2016 there were 983 metal AM printers sold. The industry expanded by $1.25 billion, most of it in metal printing, in 2017 to $7.35 billion. It is expected that just the metal AM portion of the industry will be nearly $10 billion in 5 years.
NIST themselves, along with several additional studies, state that their findings are that quality inspection cost for metal AM is 20% of the total spend. That means the current post process quality inspection spend will be $2 billion in 5 years.
So if IPQA becomes it, and the cost reduction for quality inspection due to IPQA technology is 50%, then we are looking at a metal IPQA spend of $1 billion in 5 years. If the metal AM industry adopts IPQA, and SGLB owns the patents for entry into IPQA technology, I would say SGLB at a value of $250 to 350 million immediately upon evidence of IPQA adoption is a reasonable price.
All the best,
Silversmith
AI
